🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Nasdaq has biggest one-day jump since 2020 after Fed rate hike, Powell comments

Published 07/27/2022, 07:18 AM
Updated 07/27/2022, 07:22 PM
© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 26, 2022.  REUTERS/Brendan McDermid
US500
-
DJI
-
MSFT
-
GOOGL
-
IXIC
-
GOOG
-

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks rallied on Wednesday and the Nasdaq posted its biggest daily percentage gain since April 2020 as the Federal Reserve raised interest rates as expected and comments by Fed Chairman Jerome Powell reassured investors.

In addition, upbeat quarterly reports from Microsoft Corp (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) Inc provided further encouragement about about the earnings season. increased optimism?

The S&P 500 closed at its highest level since June 8.

The Fed raised the benchmark overnight interest rate by three-quarters of a percentage point. The move came on top of a 75 basis points hike last month and smaller moves in May and March, in an effort by the Fed to cool inflation.

Powell said in a news conference following the rate announcement that he did not believe the U.S. economy is currently in a recession but that it is softening.

Powell also "didn't automatically say we needed another rate hike," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"It was a calming statement coming on the heels of a day where you saw some earnings and revenues that were better than expectations, albeit expectations that were very tempered."

The Dow Jones Industrial Average rose 436.05 points, or 1.37%, to 32,197.59, the S&P 500 gained 102.56 points, or 2.62%, to 4,023.61 and the Nasdaq Composite added 469.85 points, or 4.06%, to 12,032.42.

Wednesday's hike was also widely anticipated by investors.

"This was widely expected and encouraging that it was a unanimous decision," said Jack Ablin, chief investment officer and founding partner at Cresset Capital. "It was well telegraphed and properly balanced against expectations."

Microsoft rose 6.7% after it forecast double-digit growth in revenue this fiscal year on demand for cloud computing services. Alphabet jumped 7.7%, a day after it reported better-than-expected sales of Google search ads, easing worries about a slowing ad market.

© Reuters. Federal Reserve Board Chairman Jerome Powell attends a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S., July 27, 2022. REUTERS/Elizabeth Frantz

Advancing issues outnumbered declining ones on the NYSE by a 5.27-to-1 ratio; on Nasdaq, a 3.15-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 50 new highs and 107 new lows.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.